Flipping homes that are Realtor listed ?

[Proxyflipper]

I was curious if any of you have flipped a home that was listed with a realtor, and if so how exactly does that work, Ive been looking into it, but not much info out there on it.

Is it still possible to get a home from a realtor, flip it thru them, and still make a couple thousand ?>?

[Proxyflipper]

57 views and not one single reply ? .... Come on guys I know someone out here knows something

[narmond]

I've never flipped a realtor-listed property, however I would have to say that it would have to be an extremely incredible deal. The home would have to be way underpriced. I know it's not a preferred method of acquiring property to flip as it is usually no room for the end investor to profit.

Example: SFR listed for 65,000
Market Value after repairs completed: 120,000
Repair costs: 15,000

Now, you purchase for 65,000 and keep in mind the repair costs after acquisition - 15,000; consider agent's fees and closing costs too

Total expense for you: You're really investing at least 80,000 into the property, not to mention whatever fees are payed during closing and to the agent

So, 120,000 - 80,000 leaves 40,000 potential profit without an agent; yet, just assume the agent gets a measly 2% - that equals 13,000 for this agent (2% multiplied by the contract price - 65,000
Now add that 13,000 to the 80,000 you've invested in the property - 93,000 plus any closing costs
Say, you've spent roughly 95,000 total

120,000 - 95,000 = 25,000 profit

Maybe you could give it to another investor, charging him maybe 2,000 to 3,000 - that's it - so he or she can get at least 22,000 or 23,000. However, all you've invested - is this even worth it? The wise thing I would believe to do is to keep this property yourself and sell at retail. Just my perception of the entire transaction from start to finish; let it be known that I am a newbie. Hope this information helps.

Have a blessed evening.

[kimdrake]

Decimal point issue: $65,000 x .02 = $1,300 commission.

Watch for already underpriced properties on the MLS and contact the owner after the listing has expired.

[kwbacb]

Hi,

You most certainly can flip a property with a Realtor's assistance.  I am a Colorqado realtor and  if an investor hires me on a regular basis to do flips I reduce my commission for them -I do the math for them and search out sellers who are extremely motivated-

[dellwebb]

KWBACB,
A question. There are definitely deals out thre that are on the MLS folks, but it takes a good realtor and some searching.

However, a question. I've noticed many of the bank-owned properties in my area are now requiring 3% earnest money (these banks REALLY don't want to sell these do they?) or some proof of funds or pre-approval, making it more difficult for those of us who wish to assign properties. Any ways around this, or just ignore those properties and let the dumb bankers sit on them?

[kwbacb]

Hi,

Don't ignore these bank requirements if the amount of the loan due is well below the market value of the property-negotiate terms that are agreeable to you.  They don't want to be stuck with the property and rehab, marketing costs--they will counter your offer-

[Drew]

Seems difficult to flip properties in a state that I'm not in.  Do you already operate with out of state investors?

[dn58650]

Hi, if you have a realtor help you find listing on a regular basis, could you just offer them a $1,000 finders fee for each house you close?  I imagine if you are just looking for homes to reassign, there won't be much profit in it for you.  But if you were wholesaling them for minimum 5-10,000K each, $1,000 seems fair to me.

I thought if you purchase through an agent, the seller pays the agent fees and partial/all of the closing costs.  Why would you factor those fees into your formula?

[rgchamb]

A listing agent told me about one actually meets the "flip" criteria that I wanted to do this very thing.  However, the realtor would not accept an offer w/o a prequal letter, earnest $ and option $ & apparently doesn't understand assignments.

Blows me away since she would get her $ and the house has 20K equity & needs virtually NO rehab.  

I'll either have to give her a quick education, or just get another Realtor to submit it (which I hate to do since the listing broker called me).

[Skeeter]

Is the intent to try to buy a listed house and then "flip" to a re-habber?  I was under the assumption that you bought a house after doing the math (no matter if a realtor has it or not), do the re-hab and then sell on the open market.  I guess that's selling "retail".

I would be happy clearing a few $25K deals a year, because I work my ass off for a lot less than $75K a year! :-)

Am I looking at thi sre-hab process wrong?  Thanks and good luck to all of you.  

BTW, I really appreciate the vetrans helping us newbies out.  Very rare these days.  God bless

[rgchamb]

Actually in this case I want to assign the contract.  The house has about 20K in equity & needs no repairs.

I'm experiencing hesitatancy, i.e., Realtor does not want to make the offer, unless I pre-qual, put down earnest $ & option $, and not have a contingency about partner approval, even though it would be a win-win-win situation.

I'm a newbie that is beginning to experience that a lot of Realtors have no idea about assignments, and what they don't know, they stay away from.

[kimdrake]

It's true, the agent may not understand assignments, but I would do exactly the same thing, especially working with a new investor. It has been my experience that new investors fail to close at a much higher rate than experienced ones. If a buyer backs out because of cold feet, had no one to assign it to, what ever, I want it to hurt that person in the pocket book, at least a little. After all, I've taken the house off the market, continued to pay my holding costs, and turned away other potential buyers. Remember the agent has a duty to her client to get them the best offer possible with regards to price, terms and qualified buyer.  She wants to know what happens if you don't find an end buyer, or that you will still close if the end buyer backs out.

If you are very sure of your deal, cooperate with her, pay the EMD, offer to put non-refundable option money down. If you have someone already lined up for the assignment, get a deposit from them.

[rgchamb]

Thank you for your insightful response nfldrealtor.

This house is actually <1.5 years old & needs zero work.  It's being listed with 20K equity for a quick sale.  

I've got 1st dibs, so I figured I could assign it.  Seems like it would work well for someone to do a lease purchase for a new house in a new neighborhood if they had not perfect credit.

[kwbacb]

Hi,

I just went to your website-is it really that beautiful there?  How many months of the year are slow for you ?  Is the weather unforgiving or do people seem to do well during the coldest months?